FRL – Funding Readiness Level
FRL focusses on securing enough funding to develop the idea and to reach an economically viable and sustainable business model for the idea over time.
- The FRL is based on two core assumptions:
- Successful innovation (taking new ideas to the market) depends on finding a viable and sustainable business model for the idea so that it can create value and impact over time on the market.
- New ideas always require input in the form of people’s time, money, and other resources to be developed before they can be sold or generate revenue/value in other ways, so there will always be a need for some sort of funding to cover the resource need before you reach a viable business model.
- There are many different possible sources of funding – e.g., internal funding from yourself or your organisation; external funding from investors, banks, funding agencies, etc.; customer funding from sales, pre-sales, joint development, etc.; and so on.
- The FRL scale primarily deals with:
- What are you funding? – the idea/concept/project/business/activities you need funding for
- How much funding do you need?
- How much funding have you secured?
- The FRL scale is divided in two main stages:
- FRL 1-4: Primary focus on funding to verify and develop the potential of the idea so that you can identify a viable business model.
- FRL 5-9: Primary focus on being able to realise the business model and reach economic viability and sustainability over time.
- From FRL 5 and upwards there is a lot of focus on funding from external sources. In cases where external funding is not the chosen strategy, you can ignore the criteria that specifically relate to external funding (pitches for funding, discussions with investors, etc.), but still use the criteria that relate to keeping track of your funding need (budget, accounting, financial forecasting, etc.)
Do you know how much you need – and why?
→ Indicate your current FRL in the application – and describe what steps you plan to improve it.
This is part of KTH Innovation
Readiness Level™
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